Car Totaled But Not At Fault? Here’s What To Do

A car is considered a total loss, or totaled, when the cost to repair the car is more than your car’s actual cash value (ACV) just before the accident.

An insurance adjuster will determine whether or not your car is totaled based on the estimated ACV of your vehicle (this is what the car was worth before the accident, not what you paid for it when you bought it). This number is then compared with the cost of repair. A total loss is declared when the cost to repair the vehicle would equal or surpass a percentage of the total value set by the insurer.

This percentage formula is set by state laws and insurance companies, and may vary accordingly. Many state laws have a total loss formula (TLF) for when insurers are required to make a declaration of complete loss and total a car — frequently around 70 percent of the car’s ACV — though it can be higher or lower. To reach a total loss determination, insurers can set a higher percentage than the state, but not a lower one.

States without a TLF may compare the cost of repair to the car’s ACV. Alternatively, an insurer can total a car if it cannot be repaired safely.

Whether or not your car is totaled is not based on how drivable it looks after the accident. Repairs are often more expensive than they may appear, so even a small accident can result in a determination of your car being totaled.

When a vehicle is totaled and you are not at-fault, you’ll need to follow the steps to making a claim and acquiring proper documentation in a timely manner in order to recover the full scope of your accident-related losses. Here’s what to do.

File an Insurance Claim

After a car accident, your first step is to file an insurance claim. You’ll need to immediately report the accident to your own insurance company and then also file a claim with the at-fault driver’s insurer.

Get Your Car Damage Inspected at an Auto Shop

A full assessment of car damage needs to be conducted by professional mechanics. You can tow your car to any auto shop, though you can simplify your insurance claims process by taking your car to one that is already approved by the insurance adjuster handling your claim. The shop will provide the insurance adjuster an estimate for repairs, and the insurance adjuster will then make a determination of whether to total the car.

Get Your Paperwork Together

It is essential to provide proof in the paperwork for all accident-related losses to help your claims process. You’ll definitely need the title of your car, because if your car is totaled, you may have to sign it over to the insurance company.

You’ll also want to keep track of related paperwork that includes any bills or professional damage assessments. If you financed your car and still owe money, you’ll need to review your car loan and know how much balance remains. It’s also a good idea to do your own research on your car’s ACV to make sure the insurance adjuster’s estimate is accurate.

In most states, the insurer of the driver who is negligent or at fault for the accident is responsible for paying accident-related losses. If you are at fault for the accident, your insurance will cover other people’s damages. Your collision coverage will provide coverage for your own vehicle.

If the at-fault driver does not have insurance or is underinsured, there are still options to recover your costs. If your policy has uninsured motorist insurance (UIM) or collision coverage, you can use them to file a claim.

However, if you don’t have valid insurance in place when the accident occurs, your options for compensation might be limited. If you total a car and don’t have collision insurance, your insurer will not reimburse you for the ACV of your car.

In the event the other driver refuses to admit fault, the insurance companies will conduct their own investigation and determine who is responsible. In this case, your insurer will pursue the process of subrogation (recouping costs from another insurance company) to recover the cost of your collision claim and deductible.

Each type of insurance coverage has a policy limit that is the total amount the insurer will pay for a single car accident or claim.

If the negligent driver has a lesser amount of property liability coverage than your car’s ACV, you’ll need to get the remaining value from your own collision coverage or UIM.

Note: the Kelley Blue Book and related tools that determine the value of your vehicle may or may not account for its actual full value in all instances, such as if you have made improvements, repairs and customizations like a new set of tires, installed leather seats or added cosmetic details. In these situations, it is important to provide careful documentation in your insurance claim to make sure you are fully compensated.

In most states, you might not have to pay the deductible for a totaled car if you aren’t at fault for the accident that caused the damage. The at-fault driver’s liability insurance typically covers accident-related losses, which includes deductibles. If you are responsible for the accident, you will have to pay your deductible before your policy’s collision coverage will apply.

When you total a financed car, gap insurance (usually required by the lender) covers the difference between your car’s ACV and the amount you still owe. When you receive a settlement, the insurance adjuster will first use it to pay your lender, and after, you’ll get the remaining sum.